Information Systems and Business Forecasting

The business provided support for using Decision Support Systems (DSS) and addressed the following issues: techniques within the DSS, corporation needs and limitations, the forecast cost effectiveness, and the appropriate software system. Sales forecasting is an integral part of marketing DSS. The DSS contains tools to help the forecaster prepare better forecasts; tools are data, records of previous forecasting, and techniques. Forecasts assist marketing managers improve decision-making. In an organizational design context, forecasting should not be regarded as a self-contained activity, but should be integrated within the planning context of which it is a part. When an organization has its own forecasting expertise (prepares its own forecasts) that expertise should not be separated into a self-contained department. Forecasting and planning functions should be combined. Involvement of the forecasters in planning enables them to select criteria for evaluating forecasting methods that are meaningful within the planning context.

Managers must go beyond the typical spreadsheet software that only allows for tallying of operator expenses and does not include the technology of a DSS. Several software packages are available to business organizations that incorporate inventory management, purchasing procedures, and sales data. These software packages assist managers in forecasting sales and production requirements.

One means of an automated system in supply chain management in the business is electronic data interchange (EDI). In short, EDI is the computer-to-computer exchange of business transactions between companies. EDI is seen as a means to facilitate sales forecasting efforts by providing information that would pertain to a channel member’s demand for the products and/or services offered by the supply channel member. In turn, the supply channel member, upon receiving this information, would respond with an update to production and/or distribution schedules in order to meet this demand.